TrackX Reports Q1 2022 Financial Results

DENVER, March 02, 2022 (GLOBE NEWSWIRE) -- TrackX Holdings Inc. (TSX.V:TKX | FRANKFURT:3TH) (“TrackX” or the “Company), a Software-as-a-Service (SaaS)-based enterprise asset management solution provider, announces the financial and operational highlights from its first quarter ended December 31, 2021 (“Q1, 2022”). All results are reported in Canadian dollars unless otherwise specified. A complete set of the September 30, 2021 Consolidated Financial Statements and Management’s Discussion & Analysis has been filed on SEDAR (www.sedar.com).

During the three months ending December 31, 2021 (“Q1, 2022”), the Company continued to invest and focus on its strategy of delivering its enterprise scalable, IoT-enabled technology platform in response to increased demand by companies for better supply chain tracing, tracking, execution, and sustainability solutions. Additional enhancements in the quarter to TrackX’s SaaS based technology platform allow it to more effectively address this large market opportunity with higher margin, repeatable, partner-friendly solutions. The Company anticipates an increase in opportunities driven by current market conditions which have resulted in customers needing to accelerate their digital transformation, sustainability and Environment, Social and Governance ("ESG”) efforts in order to remain competitive in today’s global supply chain environment. Companies are seeking new technology solutions that provide improved visibility, transparency, collaboration and trust throughout their entire supply chains in order to become more efficient and able to respond to disruptions.

“As companies emerge from the impact of the most recent pandemic, supply chain visibility, sustainability and proof of ESG claims have moved near the top of the priority list for many companies,” said Tim Harvie, TrackX CEO. “In addition to these priorities, companies are also facing increased pressure to comply with new regulatory and industry mandates. Consumers are demanding that companies provide more detailed information about products they are purchasing, where they come from, how they were manufactured and their environmental impact. Over the years, TrackX has helped many companies achieve their digital transformation and supply chain objectives. Today, TrackX represents one of the only full-cycle supply chain execution platforms with the ability to scale and cater to a global market and enterprise accounts in the areas of tracing, tracking and sustainability.”

The Company saw a decline in revenue in Q1, 2022, although that decline is largely attributable to a one-time perpetual software license fee realized in three-month period ended September 31, 2021 (“Q4, 2021”) which was not present in Q1, 2022. TrackX does anticipate additional SaaS and services revenue to be generated as this perpetual software license is further leveraged in 2022 by its customer.

In the quarter, the Company appointed Kirk Ball to the Board of Directors. Mr. Ball is currently the EVP and Chief Information Officer at Giant Eagle, Inc. where he has responsibility for delivering all information technology solutions for the company. Previously, Mr. Ball served as CTO at The Kroger Company, America’s largest supermarket chain by revenue and third largest retailer (behind Walmart and Amazon).

In Q1, 2022, the Company gained additional validation of its refocused supply chain strategy. TrackX leveraged its enhanced supply chain solution platform to further expand opportunities with many of its existing customer accounts including:

• Do Good Foods: TrackX has become the end-to-end supply chain-related system of record for Do Good Foods, a climate forward food company that is working to eliminate supermarket food waste. TrackX’s end-to-end supply chain tracking and environmental monitoring solution enables Do Good Foods to provide supermarkets with data and analytics they can use to reduce the enormous waste we currently see in grocery retail. TrackX anticipates the solution to be expanded across additional facilities over the next two years.
  
  
• One of Largest U.S. National Online Auto Retailers: TrackX has successfully deployed its Keychain to provide an automated, accurate, and up-to-date accounting of vehicle inventory for audit and governance purposes, eliminating costly and time-consuming manual data collection. By tracking pertinent information about every vehicle, TrackX will become the system of record for key metrics such as car dwell time, cycle time, reconditioning performance, inventory turn-over rates and other critical analytics. During the FY2022, TrackX anticipates the implementation to be expanded to additional facilities.
  
  
• SpotLite360 IoT Solutions: In 2021, SpotLite360 leveraged a software license to utilize the TrackX Keychain platform to deliver proof of origin, chain of custody, regulatory compliance, and proof of ESG to customers in the Cannabis, Healthcare and Pharmaceutical industries. Subsequent to the quarter, SpotLite360 announced that it has engaged with Control Union to develop an end-to-end supply chain standard for the hemp industry. Under its licensing agreement with SpotLite360, TrackX will be a large contributor to the overall technology solution supporting SpotLite360’s relationship with Control Union. This is anticipated to result in additional SaaS and services revenue for TrackX in FY2022.
  
  
• Shifflet Brothers Expansion: For this Utility industry logistics provider, the TrackX solution been expanded to further address the tracing, tracking, inventory management and logistics requirements for one of the largest utility companies in California. Now that this implementation has been completed, TrackX anticipates that Shifflet will further leverage the TrackX solution to address the logistics requirements of additional customers within the utility industry.
  
  
• FourKites: TrackX has continued its relationship with FourKites, an industry leading supply chain company to which TrackX sold its yard management business to in 2020. During FY2022, TrackX anticipates an increase in software commissions earned on yard implementations completed by FourKites since purchasing the yard management business from TrackX. TrackX also anticipates that this relationship will generate additional opportunities as the companies evaluate further integrations between their respective solution platforms.
  

Financial Highlights for the three months ended December 31, 2021 (“Q1 2022”)

• Revenue for Q1 2022 of $0.529 million vs $0.884 million for the three months ended December 31, 2020 (“Q1 2021”). This decline is largely attributable to the completion of transition and implementation services associated with the acquisition of the yard management business by FourKites;
• Q1 2022 gross margin of 55%, as compared to 77% in Q1 2021 largely due to:
  • Investment in engineering and technical consulting in Q1 2022 to support the Company’s new supply chain focused strategy;
  • Decline in high margin revenue associated with the transition services provided to FourKites in Q1 2021, which ended Q2 2021;
• Net loss was $0.171 million or $(0.00)/share compared to a net income of $0.333 million or $0.00/share for the three months ended December 30, 2021;
• Adjusted EBITDA loss for the year was $0.073 million compared to a $0.278 million gain for Q1 2021;
• Recurring revenue of $0.148 million, a 27% decrease over $0.198 million for Q1 2021, largely due to:
  • A one-time audit adjustment made in Q1, 2021 which resulted in an increase to SaaS revenue for Q1 2021 but was not due to any decline in the SaaS business of the Company.

Annual Revenue Mix

Selected Financial Information

Business Outlook

The Company will continue its focus on delivering highly configurable, scalable, partner friendly SaaS-based solutions that improve clients’ supply chain processes and drive operational efficiencies. In today’s environment, most all industries have been impacted by disruptions resulting from the most recent pandemic. As TrackX positions Keychain as the “key” to digital supply ”chain” transformation for enterprise accounts, it will further leverage technologies such as blockchain, video analytics, machine learning and additional IoT sensors to gain even more real time data attributes and to prove the origin, chain of custody, location, ownership, contents and sustainability claims of products. Developments to Keychain have evolved the TrackX solution platform from delivering efficiencies within a singular enterprise account to tracing and tracking a product from source material, through manufacturing and all the way to retail across multiple enterprises and throughout the entire partner ecosystem. The platform can deliver the transparency, trust and proof of ESG that consumers now demand, and companies must provide in order to operate efficiently, remain competitive, respond to increased regulatory requirements, prove their sustainability initiatives and protect their brands.

In order to address both new account opportunities and the expansion of implementations within its current accounts, it will be necessary for TrackX to onboard additional resources to sell, configure, implement and support its solution deployments. To achieve this goal, TrackX will not only continue to onboard resources internally, but it will also place much more of focus on leveraging its network of strategic partners in such areas as:

• Hardware acquisition, implementation and support
• Expansion of solution value through tight integration with the TrackX platform
• White label licensing of the TrackX solution platform to leading industry partners
• Joint solution marketing with partners
• Strategic investment into TrackX by a strategic partner

As we emerge from the most recent pandemic, companies across all industries are returning to more normal operations. As this continues to happen, TrackX expects not only to be able to get on site to complete implementations for its current customers, but also expects that its new supply chain and sustainability focus will create an increase in new account activity and associated revenue throughout 2022.

About TrackX

TrackX, Inc. (TSX.V: TKX), based in Denver, Colorado, is the SaaS-based enterprise tracing, tracking and collaboration solution that leading brands trust to achieve more sustainable and better performing supply chains. TrackX solutions are built on an enterprise scalable and fully customizable platform that leverages a broad array of RFID, IoT (Internet of Things) and Sensor Technologies to provide item level visibility to customers across a broad array of industries, including food, beverage, brewery, automotive, retail, financial services, technology and government. For more information, visit www.trackx.com.

For more information, please contact:

Tim Harvie, TrackX Holdings Inc.
investor@trackx.com
303-325-7300

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur including the Company’s anticipated pipeline and value of current and customer deployments and future opportunities are the managements best estimates and cannot be guaranteed or relied upon and is forward-looking information. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.